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You are a Flappy Bird genius? What do you want to wager?
Online gambling is a restricted space. So tight are the regulations that only three states, Nevada, New Jersey and Delaware, allow it. The industry also suffers from payment issues; Visa and Mastercard are known for frequently not processing online gambling transactions, leaving operators in a lurch. What’s more, the existing casino industry is sporadically hostile to what it sometimes sees as upstart competition; billionaire casino-owner Sheldon Adelson has dedicated himself to squashing the new industry.
Despite all that, it is important to take note of a growing lot of people who see the space differently. Where some see rough ground, these people see unplowed opportunity.
Gamblit Gaming is one set of these pioneers. With $12 million in growth capital from American Capital, a private equity firm (bringing their total funding to $20 million), the company is now emerging at the forefront of this new industry.
For the past four years, Gamblit has been tinkering away on a portfolio of technology, a special real-money gambling platform and a strategy to make simple an industry too complex for many people’s tastes.
“It’s not complex to be complex. It is the nature of the beast,” said Eric Meyerhofer, CEO of Gamblit Gaming. In light of that, “The system is fairly complex to pull this off.”
Gamblit believes the technology platform it has developed will untangle the complexities of online gambling for a whole new class of game developers and users.
“We are bringing the abundance of games and bringing these to the regulated casino industry,” said Meyerhofer. “To do that you need a system to bring a regular entertainment game into a regular casino game.”
The company’s platform allows mobile games to add an element of gambling into their play without running afoul of regulators. Gamblit provides the backend technology to create this sort of “gamblification,” by handling payments, technology conformity to state gambling regulations, a compliant gambling engine, and various other operations.
And developers have ever more reason to add such technologies into their games. Just recently, the average user acquisition cost for freemium mobile games has exceeded the average revenue per user. Meaning on average freemium games have become a losing proposition. Gamblification could fill that deficit as a new potential revenue source.
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To be sure though, Gamblit is not pursuing tradition online poker, roulette or craps-type games. They see the most value in sweetening non-traditional gambling games by creating a “casual gambling experience,” said Meyerhofer.
“These games have millions of users within legal wage age,” said Meyerhofer and “a certain percentage would like casual wagering.”
“The key is not to overly distort the game,” said Meyerhofer. Gambling, “it’s kinda a new spin within the level.”
According to Gamblit’s website the company provides “a rules-based game world tracking system that enables the developer to control what game-world events should enable wagers.”
Ultimately, what is going on in the gambling industry “is a story of two markets,” said Meyerhofer.
“One market demographic is closer to 50[years old],” said Meyerhofer. “People who like a wagering experience, this market tracks people who would be in casinos.”
“What we are looking at is more the demographic in your late 20’s up to 45[years old],” said Meyerhofer. Because “they demand a much more engaging experience than a slot machine”
In fact, “this is something that casino operators are keenly aware of,” said Meyerhofer. Despite resistance from casino-mogul Sheldon Adelson, it’s important to note casino-heavy states Nevada, New Jersey and Delaware, were early adopters of legal and regulated online gambling.
Many casinos in those states they realized, “they can’t do anything better than they are doing in the land base,” said Meyerhofer. And because the demographic most likely to be in these sort of online casual gambling environments are younger and not in the casino yet anyways online gambling could add additional revenue on top existing businesses.
Casino operators are also acutely aware that “the internet when it comes along to your world it’s going to change it,” said Meyerhofer. And “those who get on top off it and ride the wave do very well.” Those who don’t get swamped. Casino owners are not waiting to find out.
So much is the force of the Internet Meyerhofer said “I expect the majority of states to be operating [online gambling] over the next ten years.”
And with that opportunity in sight, Gamblit is emerging from stealth-mode and actively staking a claim to this expanding territory.
“We are going to be more visible in the months going forward,” said Meyerhofer.
